Which stocks can you sell short?

The actual stocks that you can sell short are typically determined by the brokerage and are influenced by trading volume, so stocks of larger companies are more likely to be available for shorting. Check on any stocks you’re considering shorting within your brokerage account.

How do you know when a stock is heavily shorted?

The market keeps track of stocks that are sold short through a measure called short interest. You can look up a stock’s short interest in your brokerage account or on other market data websites.

Can I short sell stocks I already own?

Yes, you can sell short stocks that you own to protect your portfolio from a drop in price and avoid creating a taxable event. This is known as a short sell against the box and is a strategy utilized by long-term investors.

What is the best way to short a stock?

This depends on your risk profile. You can short a stock by buying inverse exchange-traded funds (ETFs), or you can directly short a stock via brokerage platforms. This means you would have to borrow the shares you want to short from the brokerage and sell them on the market. Shorting shares directly comes with additional fees and costs as opposed to inverse ETFs where you only pay either a small annual fee or no fee at all depending on the ETF.

Lauren Chaplin, Writer at Finder

Lauren Chaplin

Writer

Lauren Chaplin was a shopping writer at Finder, covering the latest in fashion, home, tech, wellbeing and beauty. She has a Bachelor of Journalism from the University of South Australia and has been published in South Australian newspaper The Bunyip. When she isn’t working, she's reading or bingeing on Netflix.

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